Suspects in 14-state, $2 million identity-theft ring in court
Suspects in a $2 million identity-theft ring that involves more than 100 people began appearing in federal courtrooms in the Twin Cities this week to face charges.
The scheme, which dates to 2006, involved low-tech methods of stealing driver's licenses and checkbooks, and high-tech means of producing counterfeit checks.
Dozens of victims' accounts were pilfered in the scheme, which reached across at least 14 states, sources close to the investigation said. Charges also are expected against bank employees, as well as against employees of businesses affected by the scam.
The Minnesota banks hit by the suspects, according to court documents, include U.S. Bank, Wells Fargo, American Bank of St. Paul, Affinity Plus Credit Union and HealthEast Employees Credit Union, among others.
The prosecution of suspects started last May, when Lee Vang was charged in Minnesota with passing counterfeit checks in Iowa as part of a wider conspiracy. Vang pleaded guilty in September to money laundering and aggravated identity theft.
To supply new identities for the scheme, co-conspirators allegedly would steal a victim's driver's license and checkbook, often through burglaries or smash-and-grab thefts of purses from cars . They then used computer software to take the account numbers and driver's license data and create counterfeit checks and fake ID documents.
Some of the names used by the suspects allegedly came from personal checks stolen from a safe at the Lilydale Pool
and Yacht Club on Sept. 27, according to a criminal complaint filed against Steven Lavell Maxwell, 43, of St. Paul.
Days later, Maxwell allegedly met with another suspect who had the software necessary to create counterfeit checks, the complaint says. The checks used real account and routing numbers, but Maxwell allegedly told the other suspect to "make up" names to put on the counterfeit checks.
Maxwell pleaded not guilty to the charges on Dec. 14. His case is moving toward trial.
The suspects allegedly passed counterfeit checks at retail businesses in several states, including Minnesota, Wisconsin, the Dakotas, Iowa and Illinois. Later, they'd return the merchandise for cash and divvy up the money, according to court documents.
On Monday in St. Paul, Melissa Beamon pleaded guilty to bank fraud and aggravated identity theft, after admitting to passing $24,000 worth of bad checks involving more than 10 victims from summer 2008 to March 2009.
In one instance, Beamon wrote a check for $2,400 to the Walmart in Fairmont, Minn., to purchase DVD players and other electronics. She later returned the goods for cash.
In other cases, the conspirators allegedly deposited counterfeit checks with the victims' account numbers on them into another victim's account, and then withdrew cash. The checks would clear, and the victims were unaware of the crime until they noticed the unusual account activity.
Majorie Marie Neely, 50, of Minneapolis described one such situation when she pleaded guilty to bank fraud and aggravated identity theft Tuesday in federal court in St. Paul. A check for $6,835 was drawn out of a victim's account and deposited into another victim's account, she said. Then, $5,000 was withdrawn and distributed among people involved in the scheme, she said. In total, she amassed about $23,000 from the scheme, she testified.
Neely's criminal record includes convictions for stealing a rental car and theft by swindle in Hennepin County in 2010.
"You're a frequent flier," U.S. District Judge Paul Magnuson told Neely as he set bond for her release until sentencing. "You've had a lot of trouble in the past."
He warned Neely that federal authorities "don't have a sense of humor" about repeat offenders.
The U.S. Postal Inspection Service was involved in the investigation, along with the IRS and the Minnesota Financial Crimes Task Force. Karen Schommer, an assistant U.S. attorney in Minnesota, is prosecuting the case.
Investigators working on a number of the individual identity-theft cases came to recognize that a larger scheme was in play, as the pattern of counterfeit checks being passed at Walmarts and other retailers continued.
At least three more suspects are expected to make court appearances next week, a source close to the investigation said. Other suspects eventually may face charges in state court.
Distributed by MCT Information Services